I have a few questions about a small cash business.
– whats kind of bank account should I open to pay the least taxes? I heard about a dva or LLC.
– Is it safe to deposit big chunks of cash every month as long as I amend my tax return each time and pay taxes?
– what bank do you recommend? I live in houston, texas.
– what kinds of things should I do to pay the least taxes? Buy health insurance?
I need help with a cash business and taxes.
byu/Rinareylove intax
Posted by Rinareylove
2 Comments
My $0.02
* Your bank account does not affect your tax bill.
* Having an LLC does not affect your tax bill.
* If you’re self-employed (which it sounds like) you should, ideally, be making an estimated payment every quarter.
* Your taxes are only due once a year, not every month (assuming you are talking about Income Taxes)
* You’re supposed to report all income when you file, regardless of whether it gets deposited into the bank or not
* I think you should focus less on trying to avoid taxes, and more on increasing your revenue, and just staying compliant to avoid fees / penalties
* get a bank account for your business, and ONLY use it for the business. If you pull money out for yourself, keep track of that
* I don’t live in TX, I can’t comment on what bank you should use.
* keep track of your *business* expenses. What counts as a business expense is going to depend on the nature of the business. If you’re not sure, any community of people that do similar work / a similar business would probably be glad to provide assistance.
* Your bank account has nothing to do with how much tax you pay.
* An LLC is not a type of bank account.
* An income tax return is an annual filing, done after the year ends. It would make no sense to amend it every time you make a bank deposit.
* Given your state of confusion, the best investment you could make would be to work with a qualified tax pro (Enrolled Agent or Certified Public Accountant). You can deduct at least a portion of the fees against your business income to reduce your tax bill.
You can start to educate yourself by reading [IRS Publication 334](https://www.irs.gov/pub/irs-pdf/p334.pdf) Tax Guide for Small Business.